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Wireless:
Exploring Total Cost of Ownership
in Outdoor Applications
And while many still think of wireless in terms of wireless LANs (with limited range and
primary application in the residence and the enterprise) and cellular data (with limited
throughput but significant coverage, especially in major metropolitan areas), outdoor
broadband systems are today and have been for some time provisioning significant
capacity and throughput with remarkable convenience and cost-effectiveness – especially
when compared to the wireline alternative. In fact, wireless is often the only solution in
metro-area broadband applications simply because wireline services are not available or
are the more expensive alternative. As we’ll see in this White Paper, the total cost of
ownership of an outdoor wireless network can be remarkably low, and the technology can
enable broadband services in locales that otherwise would have remain entirely unserved.
Many today thus believe that wireless networks will quite literally dominate much of the
broadband access (end-users at the edge of the network) and a significant share of the
distribution (elements between the network core and the edge) markets, and we’re
certainly inclined to agree. While wire will always play a role in legacy implementations
and some interconnect (often called backhaul) and stationary applications, wireless is
increasingly becoming the solution of choice, and for a number of reasons, as follows:
• Closing the performance gap - For many years, wireless could not compete with
the throughput and quality-of-service capabilities of wire. This has now changed,
and radically – for example, wireless LANs based on the 802.11n standard in both
indoor and outdoor applications offer much higher throughput than 100 Mbps
Ethernet. Outdoors, wireless links capable of bridging several kilometers can
yield throughput well in excess of 1 Gbps, and today have the management
capabilities required to effectively plan, configure, install, monitor, and report on
all elements of an operational broadband wireless solution. All of this means that
wireless systems are highly competitive with wired solutions based on xDSL,
cable modems, optical fiber, and metro-area Ethernet services.
• Support for any application - Early wireless links were lucky to yield a few
kilobits per second. But today’s high level of throughput available, coupled with
support for time-bounded communications like voice telephony and real-time
(and even two-way) video based on IP (often called IPTV), mean that wireless
solutions effectively duplicate the capabilities of wire, and often, as we’ll see
below, exceed them on a price/performance basis. In other words, an appropriate
wireless solution can support any application today, and at a price that is more
than competitive (and often very significantly better) than that of wire. An
application with increasing importance is the provisioning of video for law-
enforcement and surveillance applications – no longer a challenge to wireless
solutions. But “last mile” access applications using a fixed infrastructure to fixed
(and sometime mobile) clients is the classic case for outdoor wireless.
In short, wireless technologies and products have reached the point where the undeniable
convenience and flexibility inherent in the technology itself make wireless the first choice
of so many users and applications. But wireless still has the reputation, unfortunately, of
being the more expensive option when compared with equivalent wired services. As we
will demonstrate below, such is no longer the case. Wireless can indeed provide the
convenience and performance required in essentially any application, and at a cost that is
often a significant improvement over that of wire.
As we noted above, wireless by historical reputation has been assumed to yield much less
performance than wire, with the additional assumption of much higher cost in many cases.
This situation, however, has changed remarkably in the past few years with the
continuing high rate of innovation in wireless technologies, components, products,
software, standards, tools, systems engineering, and applications. In short, the
price/performance of wireless is now more than competitive with wired solutions in the
majority of installations and applications, but dominance here (or even in price or
performance alone) doesn’t tell the whole story – it’s also important to evaluate total cost
of ownership, and often in comparison to that of wire. Let’s look at the two key
components of TCO, CapEx and OpEx, in terms of both wired and wireless outdoor
networks.
CapEx normally includes any hardware and software involved, but also non-recurring,
one-time costs related to planning, installation, initial configuration and functional
verification, and required documentation. It may also include any upgrades or additional
equipment required over time as the configuration and its mission grows and changes.
OpEx includes any ongoing and recurring expenses for network operation, including
network management, monitoring, troubleshooting, maintenance, repair, training, and
support, as well as any recurring fees from service providers. Let’s examine these in more
detail for both wireless and wired networks, exploring the significant differences between
wired and wireless installations with respect to these cost components:
To sum up: with respect to outdoor networks, the key alternatives are the use of wireless
capital equipment with minimal associated installation, configuration and operating
expense, or wire with a limited capital cost (assuming the use of a service provider) but
potentially very high operating expense. And we assume here that wired installation
performed without a service provider would be a very, very rare event indeed.
Our overall approach to the analysis of cost elements for both wired and wireless in terms
of an evaluation of TCO is to perform the cost comparison just noted. As we’ll see in the
examples below, this model allows us to enter values for the various cost elements
involved in each case and determine a breakeven value - in other words, we can quickly
see the option of choice. Note, however, that we cannot directly factor in the productivity
benefits from wireless in every case. This is a “soft-dollar” element and needs to be
A Couple of Examples
We put our model to work in two real-world deployments that show how outdoor
wireless is increasingly the option of choice. Bee Cave, a small city in Central Texas, is a
good example of the benefits of cost-effective outdoor broadband wireless. The
application here is fairly straightforward - the point-to-point interconnection of municipal
buildings with the requirement for significant throughput. Bee Cave opted for Proxim
Wireless’ GigaLink® radios, which are rated at 1.25 Gbps, providing both high
performance today and significant headroom for future expansion. The installation is
currently being used for VoIP services, and expansion to provide backhaul capabilities
for Wi-Fi in a nearby park and a popular outdoor music venue are in the works. With a
population of only about 2,000 (as of 2007), this installation shows how even very small
communities can gain the benefits of broadband via outdoor wireless.
Table 1: Cost model for Bee Cave, Texas. Source: Proxim Wireless Corp.
Farpoint Group has found that wireless is increasingly the option of choice in outdoor
settings. Just as wireless LANs already match the performance of wire with a
convenience that is otherwise unmatched in the networking world, outdoor wireless links,
especially in areas where wired services are very expensive or otherwise unavailable, are
the obvious choice. Outdoor wireless solutions are also very competitive even in locales
where wired services are plentiful, again amortizing capital costs over the useful life of a
given installation in comparison to monthly recurring service costs. With an (often
overwhelming, as we saw in the examples in this document) advantage in
price/performance, wireless is today becoming the default or even primary or only access
for many in large-scale outdoor deployments, and on a global basis.
The information and analysis contained in this document are based upon publicly-available
information sources and are believed to be correct as of the date of publication. Farpoint Group
assumes no liability for any inaccuracies that may be present herein. Revisions to this document may
be issued, without notice, from time to time.